LOCAL 1085

Topical Notes

PERC rejects continuing increments, reverses 30 years of case law

On December 19, 2013, the Public Employment Relations Commission issued a pro-management decision that threw out more than 30 years of precedent regarding the payment of salary increments to employees after the expiration of a contract.

Increments (sometimes referred to as step increases or progression raises) are a common feature of union contracts. They are typically structured as automatic (usually annual) raises issued to employees who are not at the maximum of their salary range. The amount and the timing of these increments is normally spelled out by the contract. However, when a contract expires, there is usually a gap (or hiatus) before a new contract can be negotiated and put into effect. The question therefore arises as to whether increments should continue in the meantime.

In Galloway Tp. Bd. of Ed., 2 NJPER 25 (1978), PERC answered in the affirmative. As PERC explained, labor law requires the employer to maintain the status quo until a new agreement is reached with the union. If increments are issued on a regular, recurring basis, then this would be considered the status quo. The increments should therefore continue even though the old contract is no longer in effect. This interpretation, known as the "dynamic status quo" doctrine, is also applied in the private sector by the National Labor Relations Board (NLRB).

In dozens of cases over the years, PERC has repeatedly required employers to continue the payment of automatic increments during a contract hiatus. However, under the Christie administration, the Commission Chair and certain Commission members have been tilting toward management.

In the case of Atlantic County and PBA Local 243 et al., issued in December, the Commission decided to abandon the dynamic status quo doctrine. From now on, PERC announced, increments will not continue automatically after a contract expires, thus forcing employees to wait for a new contract and giving employers greater leverage meanwhile in negotiations.

Local 1085 has already felt the effect of PERC's decision in Salem County, where management refused to pay increments that were due in July 2013. Although the union promptly filed charges against the County, the union's case is no longer viable thanks to the new ruling. Similarly, the state Judiciary refused to pay increments to judicial employees in January 2014.

Although the Atlantic County case is being appealed, management will continue to have the upper hand with this issue for now.

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